I would say yes and the trend isn't new. I recall when the worker's compensation insurance issue got out of hand towards the end of Gray Davis' term as Governor. One of the major issues in the platform of Arnold Schwarzenegger was reform in this area and helped him get elected.

In recent years, California has not been considered a business friendly state. Nevada picked up on this a year or two ago and began running ads in local papers in California inviting business to move to Nevada. One graphic they used in these ads was an overstuffed pig continuing to reach into the backpockets of business for more revenue.

The current budget crisis affecting California has caused the state in recent years to initiate tax laws such as suspending the ability of businesses (with greater than 500K in taxable income) to use their net operating loss carryforwards to offset taxable income for tax years 2008 and 2009, accelerate the payment of estimated taxes in the first 2 quarters to 30% of the total amount (versus 25% previously, the difference deducted from the last two quarters) and other items as well.

What California first needs to do is attain a balanced budget beginning with fiscal austerity...perhaps easier said than done however the operation needs to be fixed before business can truly be attracted to the state. If the system in California, the government and how it operates, constructs budgets and chooses to spend money (an example would be pension reform, a political hot button issue) isn't fixed California will never be considered business friendly as it won't have the financial ability to incentivize business to move to the state. Programs must be reviewed for economic and social merit and cuts must be made. If California continues with "business as usual", the only thing that will attract business to California is the weather and the beautiful landscape.

Once major reform is achieved, then the tax code can be reviewed and tax credits and incentives can be put in place to lure business to California. At the end of the day, money in the form of tax savings and havens, are what will attract business back to the state.